New life high for Nifty, Sensex hovers around record high; here's what to expect

Nifty 50 hit a record high in early trade on Friday. The benchmark Sensex index, at its intraday high, was just 30 points shy from touching a lifetime high. Several factors, including optimism in global stock markets, are responsible.

The 30-share Sensex jumped 484.07 points to an intraday high of 75,095.18 in early trade on May 3.  Meanwhile, the broader Nifty 50 index climbed 139.5 points to hit a record peak of 22,787.70.

Why Indian stock market is trading at record high?

The Asian markets, including the Indian stock market, are surging mirroring the positive performance of global peers after the US Federal Reserve indicated a reluctance towards further rate hikes.

Strong GDP growth and corporate earnings continue to provide fillip to the market.

Interestingly, two of the top gainers in the Indian stock market were Bajaj Finance and Bajaj Finserv. A buying spree led to the companies’ shares rallying nearly 7 per cent in early trade.  The heavy buying in the shares was likely spurred of by the RBI lifting restrictions on several of the companies’ lending products.

Investors are now waiting and keeping a close watch on the US jobs data due later in the day for further insights into the FED’s interest rate plans.

On Thursday, Foreign institutional investors (FIIs) sold Indian shares worth Rs 964 crore, but domestic institutional investors bought shares worth Rs 1,352 crore, offsetting the foreign outflows.

Which Indian stocks pushed Sensex, Nifty up?

In Sensex, Bajaj Finance, Bajaj Finserv, Tata Steel, Tata Motors, M&M, Reliance, ICICI Bank, NTPC, RIL, led the gains.

Meanwhile, in the Nifty 50, ONGC, BPCL and Bajaj Auto were among the top gainers.

How Sensex, Nifty are expected to trade today?

“Global and domestic cues are positive for the markets. The decline in dollar index to 105.3, correction in the US 10-year bond yield to around 4.5 per cent and Brent crude below $84 will further strengthen the bulls. The strong pillar of support for this market is the strong buying by DIIs facilitated by the sustained flow of funds. This trend is unlikely to change anytime soon,” Dr VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services said.

“RBI lifting restrictions on some of Bajaj Finance’s products is highly positive for the stock. Short covering in the stock has the potential to trigger a surge in the stock,” he said.

“Bank Nifty has further room to move up. Delivery based buying in this segment is likely to continue,” Vijayakumar added.

A note from Geojit Financial services suggests an ever more positive outlook. It said that the benchmark Nifty index can now test the 22880-950 level, or go as high as to 23,200.